College enrollment has been shrinking, putting pressure on institutions below the elite tier. Although most attention has focused on failures of for‐profit colleges and smaller private liberal arts schools, public colleges are not immune from distress. Community college enrollment has been especially weak. A review of federal Integrated Postsecondary Education Data System (IPEDS) data from 2011 and 2021 shows that several community colleges have suffered catastrophic enrollment declines over the ten‐year period. These institutions may be candidates for consolidation, which would save taxpayer money.
Nationally, total enrollment at two‐year public colleges fell 36 percent from 7.0 million to 4.5 million over the ten years ending Fall 2021. But many community colleges have resisted the downtrend. Enrollment at Cape Fear Community College in Wilmington, NC rose 41% to 13,059 full and part‐time students according to the IPEDS data. Other community colleges seeing double digit enrollment increases included St. Philip’s College and Palo Alto College in San Antonio, TX and the College of Western Idaho in Nampa, ID. All these institutions benefit from being in regions experiencing strong population growth.
At the other end of the spectrum, over a dozen community colleges experienced ten‐year enrollment declines of 60 percent or more. These are listed in the accompanying table.
Some, but not all these institutions, are showing signs of fiscal distress. Cayuga Community College in Auburn, NY reported a net negative position of $12 million on its 2021 audited financial statements (a negative net position typically arises when liabilities exceed assets). Operating expenses of $31 million dwarfed operating revenues of $8 million, and the college only avoided an overall net loss by virtue of federal COVID-19 emergency funding which has now been discontinued.
The college serves a county in upstate New York that has been experiencing population decline since before the 2000 Census, with residents now numbering only 75,000 in 2022. As long as Cayuga County and its neighbors do not see the arrival of a new cohort of young adults, it is hard to see how the institution can become financially viable. As management stated in its latest financial report:
The College’s student population is directly influenced by the demographics of New York State and Central New York in particular. Student tuition and fees and State appropriations are both directly related to student enrollment. The College’s operational viability is substantially dependent upon a consistent level of student tuition and fees and State appropriations. While the College’s short‐term financial position has improved as a result of the Higher Education Emergency Relief (HEERF) funding received, this funding cannot be relied on to ensure long‐term sustainability.
Management went on to note that it is addressing the problem by adding programs such as a Culinary Institute. Another option worth considering would be merging with another institution and shedding duplicative costs. Onondaga Community College, 20‐miles away, has lost 40% of its students in the ten years ending in 2021, and thus should have room for Cayuga students.
Although it has lost a larger proportion of its student body, Central Texas Community College has yet to experience the fiscal distress evident at Cayuga Community College. As of FY 2022, the college had a positive net position of $156 million and, while it experienced a large operating loss, the ratio of operating revenues to expenses was much healthier than that of its upstate New York counterpart.
The college is also emphasizing fiscal responsibility. As it states in its financial report:
In order to fulfill the college’s mission and commitment to our students’ success in a fiscally responsible manner, we have and will continue to make critical financial decisions for the preservation of resources needed to meet our students’ evolving needs. The administration is continuously reviewing programs and campuses for their viability. This evaluation has resulted in the decision not to bid the follow‐on military Tri‐Services (Vo‐Tech) and Small Arms Maintenance Military Occupational Specialties (MOS) contracts, effectively ending our operations in Europe as well as closing several continental sites… [I]n 2023 we will continue to critically examine program offerings in concert with industry needs to ensure we are providing credentials that lead to successful careers for our students.
Unless shrinking colleges rein in their fixed and administrative costs, they cannot provide good value for money on a per student basis. For example, the two Ohio community colleges on the list, Belmont College and Hocking Technical College, reported costs per full‐time equivalent student of over $18,000 compared to the statewide median of $13,000.
Given both demographic factors and an increasing tendency of employers to drop college degree requirements, America’s need for community college education appears to be well past its peak. While some institutions are still thriving in this tougher environment, others may no longer be cost‐effective. Rather than further subsidizing community colleges through free tuition and other programs, state and local policymakers should instead be looking for opportunities to right‐size and consolidate these schools. And voters should be very skeptical if their local community college district places a new bond measure on the local ballot. They may be funding educational infrastructure that will not be fully utilized.
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